 Yen weakened broadly in a relatively quiet Asian session, dragged down by disappointing PMI data. The worrying sign is that both manufacturing and services sectors are now in contraction, pointing to growing signs of weakness in Japan’s economy. Despite expectations that BoJ will raise interest rates further this year, supported by strong wage growth, today's data raises fresh doubts about the timing and viability of the central bank’s tightening path. The weakening economic backdrop also arrives at a delicate time for Japan, with the specter of new US tariffs looming. Downside risks from a global trade war could weigh on Japan’s export-dependent economy. Rising input costs and shaky external demand may ultimately delay further rate normalization. Adding to the uncertainty, confusion over the shape and scope of US President Donald Trump’s “Liberation Day” tariffs continues to swirl. A report from the Wall Street Journal over the weekend suggested the White House is set to "narrow" its approach. The current thinking appears to be a scaled-back plan that will still include reciprocal tariffs but may delay industry-specific measures. This may align with Trump’s previous remark that there would be “flexibility”. Until the April 2 announcement materializes, traders are likely to remain in a wait-and-see mindset, with many choosing to reduce exposure amid headline risk. Market movements in this environment may be temporary and driven more by short-term positioning than conviction. The broader direction for currencies and equities may not be defined until the full scope of the tariffs and their retaliations are well-understood.... | 
